WTO vs. Biotech - Any Winners?

The long-awaited World Trade Organization decision on biotechnology applied to agricultural products, released in February, elicited a great deal of buzz throughout the business, financial and biotech communities.  Most analyses scored it a resounding victory for the United States and its co-complainants, and a stinging defeat for European Union (EU) protectionism.  The reality is that it is a partial and largely hollow victory.  

Until the WTO case was filed, European politicians freely admitted that a moratorium existed.  Although anti-biotechnology activists hailed it as a sign of European moral superiority, in 2001 then-EU Environment Commissioner Margot Wallströöm acknowledged that the moratorium was "an illegal, illogical, and otherwise arbitrary line in the sand."  When it came time for a WTO defense, the Europeans flip-flopped by attempting to deny that a moratorium had ever existed - but still, they argued, if it had existed, it would have been perfectly legal.

The WTO decision also makes clear that existing national bans on certain biotech foods in Austria, France, Germany, Greece, Italy, and Luxembourg are blatant violations of those countries' treaty obligations.  When the United States filed its initial complaint in 2003, European politicians insisted the move was unnecessary.  EU Trade Commissioner Pascal Lamy boasted, "We are confident that the WTO will confirm that the EU fully respects its obligations."  But then, as now, the European Commission was famously impotent in persuading its rogue members to conform to EU policies.  That those violative national bans all still exist argues the need for intervention by the international community (ironically, reflecting Europe's ongoing game of bureaucratic musical chairs, the current WTO Director General is none other than Pascal Lamy).

The most important victory for the United States and its partners is the WTO's judgment that the EU failed to abide by its own regulations and has violated the provision against "undue delay" - a significant term - in its voting on applications for the marketing of twenty-five agbiotech products.  Although all twenty-five product applications already had been approved by EU scientists, for transparently political reasons rather than concerns about consumer health or environmental protection, the EU Regulatory Committees and Council of Ministers repeatedly refused to sign off on the final approvals.  In 2003, EU Commissioner for Health and Consumer Affairs David Byrne acknowledged that the official European Commission position was that currently marketed, gene-spliced crop varieties pose no greater food safety or environmental threat than the corresponding conventional food varieties.  The safety and usefulness of the technology have been endorsed by dozens of scientific bodies around the world, including the French Academies of Science and Medicine, UK Royal Society, U.S. National Academy of Sciences, American Medical Association, and many others.

The good news, then, is the WTO panel's chastisement of the EU for failing to follow its own regulatory rules.  The bad news is the absence from the panel report of any condemnation of those rules themselves, in spite of the fact that they are blatantly unscientific and clear violations of the trade treaties enforced by the WTO.  Under the various WTO-enforced treaties, member countries are free to enact any level of environmental or health regulations they choose - with the stipulations that (1) every so-called sanitary or phytosanitary regulation must be based on the results of a risk analysis showing that some legitimate risk exists, and (2) the regulation must bear a proportional relationship to that risk.  Every risk analysis performed by countless scientific bodies worldwide has shown that the splicing of new genes into plants, per se, introduces no incremental risks, and a report summarizing the conclusions of 81 different EU-funded research projects spanning fifteen years concluded that because gene-spliced plants and foods are made with highly precise and predictable techniques, they are at least as safe, and often safer, than their conventional counterparts.

Thus, in the EU's regulatory approach, not only is there not a proportional relationship between regulation and risk, there is actually an inverse relationship between degree of risk and amount of regulatory scrutiny.  This is both absurd and illegal.  It is disappointing that the WTO did not condemn the clearly illegitimate European policies, but the WTO's actions were limited by the fact that the complainants did not even challenge them.  How can that be?  Simple - the United States, Canada, and Argentina didn't challenge those policies because they use the same flawed basic approach as the EU.  Their regulations all discriminate against the products of gene-splicing.  At American regulatory agencies, for example, the approach to regulation is both internally inconsistent and also incompatible with the official overarching federal policy, which stipulates that oversight of biotechnology products should be "risk-based," "scientifically sound," and focused on "the characteristics of the biotechnology product [but] not the process by which the product is created."  In other words, products with more risk should have more regulatory scrutiny, which is only common sense.  But confounding official policy, scientific consensus, and logic, the U.S. Environmental Protection Agency and Department of Agriculture have crafted exactly the opposite: regulation that has an inverse relationship to risk, and that is triggered by the use of more precise and more predictable gene-splicing techniques.  (TCS Daily, 2/27/06). 

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